What question did this study set out to answer?

To assess the resilience of the Japanese economy amidst global shocks and persistent inflationary pressures.

April 3, 2026IMF country report0 citationsOpen Access

Japan

IDInternational Monetary Fund. Western Hemisphere Dept.

Key Points

To assess the resilience of the Japanese economy amidst global shocks and persistent inflationary pressures.
Analyzed economic indicators such as GDP growth, inflation rates, and wages.
Examined domestic demand and unemployment trends.
Evaluated the impact of demographic factors on economic performance.
The Japanese economy is growing above potential with robust domestic demand.
Unemployment remains low despite inflationary pressures.
Nominal wages are increasing significantly, though concerns about household purchasing power persist.

Abstract

The Japanese economy has displayed impressive resilience in the face of global shocks and output is growing above potential. Domestic demand has been robust and unemployment remains low. After three decades of near-zero inflation, prices grew faster than the BOJ’s 2-percent target for over three and a half years before moderating in January. While nominal wages are rising at a historic pace, there are persistent concerns about the cost of living as high inflation erodes household purchasing power. Japan continues to face challenges from its aging population and high public debt.

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